How businesses can create an energy transition strategy

Research from Bip found that the total investment by the oil and gas sector in renewables rose to US$17 billion in 2022, almost six times the rate of 2019. This represented a 5.2% CAPEX investment compared to 2019’s 0.7%.³

With energy supply and sustainability leading the agenda at International Energy Week 2023, Carlo Capé, Co-Founder and CEO of Bip and BIP UK , has outlined three key focal points for businesses aiming to reduce emissions and guarantee energy security.

Base your targets on data

It has been a consistent pitfall of climate change policy that businesses’ energy related pledges and targets do not reflect the reality of their energy usage. Ambitious goals can often be made without a strong foundational understanding of an organisation’s current emissions and the drastic change needed to meet such targets, or even net-zero.

For an effective solution, businesses must collect and analyse data properly to understand how they use energy and its corresponding emissions, and these findings must be visible and understood at a board level. Only once data is foundational for your business’ energy transition plans can targets and metrics be reliably made. These targets form the basis of the roadmap for improving emissions. Without these metrics, a business is flying blind and risks falling behind on the basic requirements on climate reporting.

Fail to plan and you plan to fail

Having a reliable framework in place for a business’ energy transition which can be followed internally, and reflects the goals of the wider world, will be crucial for its success. These are often complex and many businesses may need support to ensure plans are achievable in both the short-term and long-term.

The end goal, whether it is reducing a business’ emissions or its expo-sure to energy insecurity, will be rooted in data and backed with clear evidence for gauging success. From kick-off, your transformation team should know exactly what success looks like and will be prepared to alter legacy processes which conflict with the end goal. Critical deci-sions should be well-defined, with each team member empowered to make the necessary calls.

Embed a company-wide commitment to ensure success

While a dedicated transition department, or external support, which is responsible for a company meeting its sustainability goals is important, strategies must be embedded within the entire company for it to work. Recommendations on the reporting and measurement of emissions, the collection of data or corresponding roadmaps, for example, are nullified if policies cannot be applied across an entire organisation.

Changes of this scale begin at the board level, but their success is guaranteed with company-wide application. A coordinated approach which is layered to the very foundations of the organisation will mean your desired energy policy is factored into every decision-making process.

Carlo Capé, Co-Founder and CEO of Bip, said: “The fundamental nature of energy supply is changing and the discussions that are being held at International Energy Week reflect this. Across industries in 2022, we saw energy price rises and rampant insecurity over supply. While it is promising that this led to substantial progress in renewable investment figures, we’re still far from the desired end goal.

“The deadline set by the Paris Agreement for a 45% reduction in carbon emissions by 2030 is approaching and the next few years will be critical for ensuring that an environmental tipping point is not reached. Busi-nesses have a vital role to play, changing their outlook and processes to reflect the new state of the energy market and the ever-pressing need to reduce carbon emissions. Adaptability and flexibility will be the new objectives, removing reliance on vulnerable sources of supply and improving our use of renewables.”

Sources

1. Data on European gas prices sourced from European Gas Hub.
2. 2022 Global Carbon Emissions sourced from NOAA Research News.
3. Figures on capital expenditure by the oil and gas sector sourced from internal Bip data.

Read the article online at: https://www.energyglobal.com/other-renewables/03032023/how-businesses-can-create-an-energy-transition-strategy/